New Jersey Life and Health State Practice Exam

What is a primary feature of an Accelerated death benefit rider?

1. Allows the policyholder to withdraw funds for educational expenses

2. Enables early access to death benefit under certain conditions

3. Provides additional coverage for accidental death

4. Offers a refund of premiums paid if the insured survives

The correct answer is: Enables early access to death benefit under certain conditions

A primary feature of an Accelerated death benefit rider is that it enables early access to the death benefit under certain conditions. This rider is designed to provide financial relief to policyholders who are diagnosed with a terminal illness or certain critical conditions. Rather than waiting for the event of death to receive the benefit, the insured can access some portion of the death benefit while still alive, allowing them to use the funds for medical expenses, personal care, or to address other financial needs during a challenging time. This feature empowers policyholders by giving them flexibility and support when facing serious health concerns, thus making it a crucial component for many looking to manage the financial implications of critical illnesses. Other options presented may relate to different aspects of life insurance or riders but do not capture the essential purpose and function of an Accelerated death benefit rider.